US-based oilfield services companies Patterson-UTI Energy and NexTier Oilfield Solutions have signed a definitive merger agreement to combine in an all-stock merger deal that would value the combined company at about $5.4bn.
Under the terms of the agreement, the shareholders of NexTier Oilfield Solutions will receive 0.7520 shares of Patterson-UTI Energy’s common stock for each share of the NexTier common stock held.
The merger agreement has been unanimously approved by the boards of directors of both companies.
Following the closing of the deal, Patterson-UTI Energy’s shareholders will own nearly 55% of the combined company on a fully diluted basis while the remaining 45% stake will be held by the shareholders of NexTier Oilfield Solutions.
Headquartered in Houston, Texas, NexTier Oilfield Solutions offers well completion and production services across active and demanding basins.
The company acquired Alamo Pressure Pumping in 2021 which added significant dual-fuel horsepower to its Tier 4 pumping portfolio.
NexTier Oilfield Solutions president and CEO Robert Drummond said: “Our agreement to merge with Patterson-UTI brings together two complementary organizations to create a premier North American drilling and completions company.
“We believe offering a comprehensive suite of solutions on one integrated platform will position the combined company as the partner of choice for a greater number of customers across geographies and throughout the full well life cycle.”
Through the merger, the companies aim to create a contract drilling business with 172 super-spec drilling rigs and directional drilling business.
Besides, the combination will result in a well completions business with deployed capacity of 45 active spreads and 3.3 million hydraulic fracturing horsepower and about two-thirds of deployed fleets being dual fuel capable.
Patterson-UTI Energy was formed in 2001 through the merger between Patterson Energy and UTI Energy.
The company delivers oilfield services and products including contract drilling, pressure pumping and directional drilling services to oil and natural gas exploration and production companies in the US and other select countries.
Patterson-UTI Energy CEO Andy Hendricks said: “This merger unites two top-tier and technology-driven drilling and well completions businesses, creating a leading platform at the forefront of innovation.
“As one company, we will have a significantly expanded, comprehensive portfolio of oilfield services offerings across the most active producing basins in the United States, along with operations in Latin America.”
The merged business will operate under the name Patterson-UTI Energy and the well completions business will operate under the NexTier Completions brand.
Subject to Patterson-UTI and NexTier shareholders’ approval, regulatory approvals and other customary conditions, the transaction is anticipated to be completed in Q4 2023.
